Yorkshire Building Society Reveals Consumers Are Living On The Edge
A significant number of Britons could find themselves open to financial risk, it has been suggested.
In a study carried out by the Yorkshire Building Society, it was revealed that the typical adult would only be able to successfully manage for 52 days before running out of cash should illness mean that they become unable to work. Such consumers were reported to have typical monthly outgoings of 1,445 pounds, with accessible savings of 2,474 pounds. However, it seems that monetary difficulties could be more acutely felt by the 36 per cent of respondents who state that they could only manage for 11 days. Among those most likely to be left exposed by a lack of savings in the event of losing their income were shown to include people who are employed on a part-time basis or those who are divorced.
Due to such difficulties with money, it may be possible that an unexpected loss of income means people quickly develop problems in managing various areas of monetary constraint such as personal loans, credit and store cards, household bills and mortgage payments.
Commenting on the figures, Tanya Jackson, corporate affairs manager at Yorkshire Building Society, said: “In the current economic climate, this research paints an extremely alarming picture for those consumers without any protection products in place. Finances for many are already finely balanced due to the rising cost of living and the research reveals that both state benefits and savings are not viable options for the majority of consumers to rely upon for an adequate length of time.”
She added that as “it is extremely worrying to see that many Britons are living on the edge”, consumers should take steps to ensure their finances will be protected in the case of illness.
In the event of losing their source of income it appears the majority of people are set to develop monetary difficulties. Figures from the financial services firm shows that nine out of ten Britons do not have personal income protection cover in place should they become unable to work. Meanwhile, just over two-thirds (68 per cent) state that they either do not know how they will keep manage their finances or have unrealistic expectations about how the will be able to do this. In an attempt to get access to money, however, five per cent of respondents report that they would consider selling their homes to generate funds.
The study also reveals that less than half of people (47 per cent) have life insurance, with under a fifth taking out critical illness cover.
For consumers with concerns about their capacity to manage their money, taking out a secured loan might be useful. By taking out a loan secured against the value of their property, borrowers could find that they are able to meet various areas of financial constraint quickly and affordably. The fiscal assistance this kind of loan provides may also mean that people can obtain comprehensive income protection insurance. Such borrowing might be especially useful for many Britons after a recent Shelter study showed that rises in the cost of living are causing significant proportions of people to make spending sacrifices.
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